The House of Representatives passed a bill to increase oversight over universities that receive foreign donations and investments on Mar. 27.
The Defending Education Transparency and Ending Rogue Regimes Engaging in Nefarious Transactions Act furthers Republican-led efforts to reinforce reporting requirements for foreign funding — particularly from entities linked to China and other nations characterized as opposed to U.S. interests — in higher education. Republican lawmakers argued that foreign adversaries use financial ties to exert influence over American colleges.
Penn — which has previously faced congressional scrutiny over its financial ties — may be affected if the DETERRENT Act is signed into law. All universities and colleges that receive federal aid are impacted by these provisions, according to a fact sheet linked on House Committee on Education and the Workforce Chairman Tim Walberg’s (R-Mich.) website.
A request for comment was left with a University spokesperson.
While federal law requires universities to disclose certain foreign funding under Section 117 of the Higher Education Act, GOP legislators contend that many institutions fail to comply, which enables external influences to remain unchecked. Proponents of the bill claim that these foreign governments use academic partnerships to push propaganda, restrict free speech, and access sensitive research.
Among other provisions, this legislation cuts the foreign gift reporting threshold for universities — including Penn — from $250,000 down to $50,000, with an even harsher $0 threshold for “countries and entities of concern.” It additionally requires disclosure of foreign gifts to individual staff members and faculty at research-based institutions and establishes consequences for universities that do not comply, such as potential fines and the loss of Title IV funding.
In a statement to The Daily Pennsylvanian, Walberg wrote that “the lack of transparency around foreign relationships with our nation’s universities should concern every American,” specifically amidst instances of “stolen research, antisemitic propaganda, and academic censorship.”
“We should be loud and clear; no American university should be helping the Chinese Communist Party or other entities continue to threaten U.S. national security,” the statement read.
Walberg also called on Senate members to vote on the bill, claiming that its passage will bind institutions to a “higher standard than ‘taking foreign money first, asking questions later.’”
Penn has also been on the receiving end of Republican criticism over the Penn Biden Center for Diplomacy and Global Engagement, which lawmakers have referenced in broader concerns about foreign influence in academia.
In January 2023, the DP reported on a letter sent by the United States House Oversight and Accountability Committee to former Penn President Liz Magill. The letter inquired about foreign donations and visitors to the Penn Biden Center after the discovery of classified documents at the Washington think tank.
In a previous statement to the DP, a University spokesperson denied allegations of foreign influence, writing that “the Penn Biden Center has never solicited or received any gifts from any Chinese or other foreign entity."
Rep. Greg Murphy (R-N.C.) and Rep. Jason Smith (R-Mo.) also sent a letter to Magill in March of 2023. These letters were sent to fifteen private colleges and universities with the largest endowments, including Penn. It specifically called on them to purge their investment portfolios of listed entities deemed a threat to national security.
In the previous session of Congress, the DETERRENT Act passed the House with overwhelming bipartisan support in a 246-170 vote, with 215 Republicans and 31 Democrats. With the House passing this legislation again this session, it will go to the Senate to be voted upon.
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